"An article by David Weiner on the MarketWatch site reminded me of just how weak the economic arguments against the gold standard are. Its title: "A Fool's Gold Standard." I examine this article here.

"The arguments by American critics of a gold standard all rest on this unstated presumption:

"The economic outcomes of policy decisions made by a committee of 12 salaried bureaucrats, 7 of whom were appointed by the president of the United States, and 5 of whom were appointed by the largest regional banks that own a majority of shares of the 12 regional Federal Reserve banks, are better for the nation than the decisions of millions of owners of gold coins, who seek their own interests. ..."

The tragedy is so few act when the collapse is predictably inevitable, but not yet manifesting in daily life. That chill you feel in the financial weather presages an unprecedented--and for most people, unexpectedly severe--winter of discontent. Rather than sugarcoat what's coming, let's speak plainly for a change: none of the promises that have been made to you will be kept. This includes explicit promises to provide income security and healthcare entitlements, etc., and implicit promises that don't need to be stated: a currency that holds its value, high-functioning public infrastructure, etc. Nearly "free" (to you) healthcare: no. Generous public pensions: no.

For many decades the Federal Reserve has rigged the bond market by its purchases. And for about a century, central banks have set interest rates (mainly to stabilize their currency’s exchange rate) with collateral effects on securities prices. It appears that in May 2010, August 2015, January/February 2016, and currently in February 2018 the Fed is rigging the stock market by purchasing S&P equity index futures in order to arrest stock market declines driven by fundamentals, and to push prices back up in keeping with a decade of money creation.

No one should find this a surprising suggestion. The Bank of Japan has a long tradition of propping up the Japanese equity market with large purchases of equities. The European Central Bank purchases corporate as well as government bonds. In 1989 Fed governor Robert Heller said that as the Fed already rigs the bond market with purchases, the Fed can also rig the stock market to stop price declines. That is the reason the Plunge Protection Team (PPT) was created in 1987.

Keeping up with seasonal trends, this January too was positive for gold.

The fact that two big gold buyers, India and China, get involved during the period brings in the positive bias. India loads up in preparation of the ensuing wedding season and China readies for the Lunar New Year.

From an economic perspective, gold’s rise since mid-December has coincided with the US dollar's free-fall that began just after the US Fed raised interest rates for the fifth time since the rate-hike cycle began in December of 2015. However, stronger than expected jobs data accompanied by hawkish Fed rhetoric took some sheen off gold. All in all, gold managed a close at $1345.15 an ounce clocking gains of 3.2% for the month.

The Fed’s tightening plan sounds like my fat buddy’s diet plan at my workplace. He still scarfs down his usual 2 Big Macs a day (sometimes 3), but has lately taken to washing it down with a diet Coke instead of a regular Coke. “Gotta watch my weight”, he recently told me. – comment from “Marcus”

Sometimes I wonder if the Fed is just toying with the financial media and economic analysts. The Fed’s constant threat to raise rates and unwind its balance sheet seems to be taken seriously by most commentators. Even the few analysts I respect, like David Stockman, include the assumption the Fed will reduce its balance sheet by a few hundred billion per year.

We can do better, and if we don't, the only possible output of such an unequal system is increasing social disorder.

We are in a very peculiar point in history. On the one hand, we're reassured that all is well because Every One of the World’s Big Economies Is Now Growing. (NY Times) Yet at the same time, we read that "Something Is Very Wrong With The Global Economy": Richest 1% Made 82% Of Global Wealth In 2017 and are asked, Can the World Survive a Winner-Take-All Global Economy? Even the authors of the rah-rah NY Times piece on the wonderfulness of the global economy expressed concern that this "growth" may not be distributed any more equally than the previous 10 years of "recovery."

The leverage in the economic system has become so extreme; investors have no idea of the disaster that is going to take place during the next stock market crash. The collapse of the U.S. Housing and Investment Banking Industry in 2008 and ensuing economic turmoil was a mere WARM-UP for STAGE 2 of the continued disintegration of the global financial and economic system.

While the U.S. and the global economy have seemingly continued business as usual since the Fed and Central Banks stepped in and propped up the collapsing markets in 2008, this was only a one-time GET OUT OF JAIL free card that can’t be used again. What the Fed and Central Banks did to keep the system from falling off the cliff in 2008 was quite similar to a scene in a science fiction movie where the commander of the spaceship uses the last bit of rocket-fuel propulsion in just the nick of time to get them back to earth on the correct orbit.

The point is going up against the rich and powerful is known to be a losing proposition … for most, but not ALL, of the time, The tide has now turned when it comes to serious sexual harassment issues. The scandal took decades to surface. And, in my opinion, the same is going to be the case for the biggest financial market scandal in US history, that being the wrongful suppression of the gold/silver prices

Bill Murphy’s speech at the Vancouver Resource Investment Conference is a must-read. The truth about the Central Banks and Government intervention in the precious metals market is out “there” for everyone to see. But the public prefers to keep its eyes wide shut. Those elected or appointed to positions to prevent illegal market interference are well-paid by the banks to look the other way. The suppression of gold/silver prices is designed to hide horrifying truths about the U.S. financial and economic system. Truths that most do not recognize and most of the rest prefer to pretend don’t exist. But, you can ignore reality but you can’t ignore the consequences of reality. Then the reality hidden by gold price suppression can no longer be ignored, 99.5% of the populace will have no chance to protect themselves – the prices of gold and silver will be out of reach….

Gold futures lifted their winning sessions to five in row Wednesday, and settled a new, more than four-month high.

Gold for February delivery rose $2.10, or 0.2%, to end at $1,339.20 an ounce on the Comex division of the New York Mercantile Exchange. The settlement was again the highest since Sept. 8 when prices finished at $1,351.20 an ounce.

Central banks have guaranteed a bubble collapse is the only possible output of the system they've created. The psychology of blowoff tops in asset bubbles is fascinating: let's start with the first requirement of a move qualifying as a blowoff top, which is the vast majority of participants deny the move is a blowoff top. Exhibit 1: a chart of the Dow Jones Industrial Average (DJ-30):

Is there any other description of this parabolic ascent other than "blowoff top" that isn't absurdly misleading? Can anyone claim this is just a typical Bull market? There is nothing even remotely typical about the record RSI (relative strength index), record Bull-Bear ratio, and so on, especially after a near-record run of 9 years.

Stay tuned as gold price discovery and reset rewards the gold saving Chinese Households at the expense of US and other Western Households that have for more than 40 years over-consumed and under-saved, with little to no gold set aside for rainy days.

Money manager Michael Pento says recently rising interest rates are signaling big trouble for the economy. Pento contends, “There are so many things that can go wrong with rising interest rates. First of all, you have to understand that the permabulls that you hear on CNBC will tell you there is nothing wrong with rising interest rates. It is a symbol of growth. If you look at industrial production and retail sales for January, they were negative. So, rising rates are occurring, not because of growth, they are caused by insolvency concerns. That is the key metric here, and they are credit risks and insolvency concerns.”

Who is insolvent? Pento says, “Europe is insolvent. The United States is insolvent. . . . We have $21 trillion in debt. That’s seven times our revenue. So, we are technically insolvent. You haven’t seen anything yet because as interest rates rise, debt service expenses rise. . . . Certainly, beyond a shadow of doubt, the Bank of Japan is insolvent.” ...

Tonight I would like to step back and take a serious look at silver. I believe the chartology is beginning to speak to us that this is a huge opportunity that is setting up right now for those who can be a little patient. But first let’s take a quick look at todays market.

That’s a screen shot I took off of the lead headline on Drudge today, so the public now knows…the cats out of the bag. That’s right you heard it here first as weeks ago this theme was outlined and made clear that it was coming our way in a hurry. The PM markets responded accordingly.

In the weekend report it was pointed out that we should all keep out eye on the VIX. If the VIX stayed elevated expect more trouble for the stock market, it it dropped below 20 then we could expect the market to have a decent rally or even recover its losses of the past 10 days. Well today we got the move below 20 and the market is starting to look a bit better as the chart below shows.

No change for inflation, despite falling food prices. However, the picture for the rest of the year suggests that inflation will fall as a result of the effects of the depreciation of the pound being stripped out of the index and the prospect of rising interest rates.

In his latest report, economist John Williams asks the question, “Did the Fed trigger the stock sell-off?” Williams answer, “It sure looks that way. With all the heave [sec] selling, the bond yields were rising and investors didn’t like that. Risings bond yields means someone is selling bonds. The Fed was not selling bonds, they were not rolling over the bonds they normally wood [sec]. . . . There was a big drop in the amount of bonds the Fed was holding in the last week by about $10 billion. That was the biggest weekly decline since August of 2012. . . . It was enough to put some upside pressure on the interest rates . . . and that was a trigger (for the stock market sell-off). Normally, you don’t crash from an all-time high, not that it crashed, but you did have pretty heavy selling. You didn’t see much movement in the dollar. You didn’t see much movement in gold, and when this market really goes, I think you are going to see the dollar selling off very rapidly and gold being a flight to safe haven.”

The illusion that risk can be limited delivered three asset bubbles in less than 20 years. Has anything actually changed in the past two weeks? The conventional bullish answer is no, nothing's changed; the global economy is growing virtually everywhere, inflation is near-zero, credit is abundant, commodities will remain cheap for the foreseeable future, assets are not in bubbles, and the global financial system is in a state of sustainable wonderfulness. As for that spot of bother, the recent 10% decline in stocks: ho-hum, nothing to see here, just a typical "healthy correction" in a never-ending bull market, the result of flawed volatility instruments and too many punters picking up dimes in front of the steamroller. Now that's winding up, we can get back to "creating wealth" by buying assets--$2 million homes in Seattle that were $500,000 homes a few years ago, stocks, bonds, private islands, offshore wealth funds, bat guano, you name it. Just borrow whatever you need to borrow to buy more. (But don't buy bitcoin. No no no, a thousand times no. It is going to zero, Goldman Sachs guaranteed it.)

Ignoring or downplaying these fundamental forces has greatly increased the fragility of the status quo. The term dead cat bounce is market lingo for a "recovery" after markets decline due to fundamental reversals. Markets tend to bounce back after sharp declines as participants (human and digital) who have been trained to "buy the dips" once again buy the decline, and the financial media rushes to reassure everyone that nothing has actually changed, everything is still peachy-keen wonderfulness. I submit that the past 9 years of market "recovery" is nothing but an oversized dead cat bounce that is finally ending.

once a nations currency crosses the threshold from sound honest money – backed by gold and silver – and becomes a dishonest free floating fiat currency, backed by “faith and credit” the entire system, government, economy, banking and financial, must follow suit in order to hide the lie the currency is telling. Beginning in 1913 this is exactly what happened to the U.S. dollar when it morphed into the Federal Reserve Note. This corruption is now on full display in our everyday lives. So-called “representatives” show absolute contempt for their constituents and bow before their owners – the banks and corporations that pay bribes in the form of “campaign contributions”.

Hal's insight:

Click through for the full post. This is a very good reason to own gold and silver.

The ensuing social disunity and disruption will be of the sort many alive today have never seen.

Social movements arise to solve problems of inequality, injustice, exploitation and oppression. In other words, they are solutions to society-wide problems plaguing the many but not the few (i.e. the elites at the top of the wealth-power pyramid). The basic assumption of social movements is that Utopia is within reach, if only the sources of the problems can be identified and remedied. Since inequality, injustice, exploitation and oppression arise from the asymmetry of power between the few (the financial and political elites) and the many, the solution is a reduction of the asymmetry; that is a tectonic realignment of the social structure that shifts some power—economic and/or political—from the few to the many. In some instances, the power asymmetry is between ethnic or gender classes, or economic classes (for example, labor and the owners of capital).

Hal's insight:

Click through for the rest. I definitely l feel that my pie has shrunk.

Gold futures climbed for a third day in a row Thursday, and closed at a new, nearly 1-1/2-year high.

Gold for February delivery added $6.60, or 0.5%, to settle at $1,362.90 an ounce on the Comex division of the New York Mercantile Exchange. The settlement was the highest since Aug. 4, 2016, when prices closed at $1,367.40 an ounce.

Total Breakdown January 23 (King World News) – Multi-billionaire Hugo Salinas Price: The predictable consequence of a whole world under the management of a false economics based on induction – i.e. experimentation – is an inevitable total disaster for the world. The thinkers of the world are hoping that Christian Russia and Confucian China, the two great powers of Eurasia, will return to gold as money, by virtue of their military power, and sweep away, as Napoleon did before them, the present existence of “Assignat-like” fiat moneys in the world…

Every month consumer debt in aggregate hits a new record. Auto loans and student loans have been hitting monthly record highs for quite some time. In November credit card debt hit a record high in total and increased a record monthly amount for any one month. Mathematically this can’t go on forever. In fact, there are signs – indicators not reported widely by the financial media and, predictably, completely disregarded by Wall Street – that indicate the debt party is coming to an end. Events that follow the end of the party will be less than pleasant for the majority of U.S. households.

Every week in the Short Seller’s Journal I present data which reflects the deteriorating condition of middle class America. For definitional purposes, “middle class” is defined as any household that is unable to afford their own politician, which means 99.5% of all households.

Larry Elliott wonders whether we're on the brink of another developing world deb t crisis. I have to say that on the evidence of his article it's difficult to conclude that we are; there's no a lot of evidence of lots of LEDCs getting into major difficulty, and, yes, global interest rates are rising but there still not very high, and do, to my mind, the risk of sizeable default doesn't strike me as massive.

Equally, even with the example he offers - about a loan to Mozambique, it seems the root cause of the issue is governmental corruption rather than anything else. And hem ight be right in impyying that Credit Suisse and VTB have the country by the throat, but it's maladministration that's caused this - nothing else.

So, whilst developing country debt is a problem - I don't think it's currently quite the story that the Observer would like it to be.

I love sitting down with Craig Hemke, TFMetals Report, not only does he share great information it is a lot of fun with some laughter thrown in to keep these all-too-serious conversations a little lighter. When you’re dealing with such subjects as our monetary past and what we see as our monetary future, humor is a necessary ingredient.

All the wizards and their magic potions in pots from medieval times couldn’t pull it off but the bankers did 40 years ago. They managed and turned ether, nothing, into this confidence scheme of “yes I own gold” No, you don’t. You own a piece of paper that says you are exposed to the price. But you don’t own gold. Craig Hemke ~The Daily Coin

The Federal Reserve System hijacked the U.S. economy, banking and financial systems in 1913 and foisted upon the citizens a system of debt that replaced a perfectly good gold based system that allowed for freedom, economic prosperity and kept the government and bankers in check. One hundred and five years later we are being force fed the fruits of a criminal system where corruption, deceit and propaganda are part of the landscape and the citizens no longer even notice the stench of a rotting economic corpse.

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